Running costs are continuing to rise across the private rented sector with maintenance and repairs now absorbing close to 40% of total landlord expenditure in some instances.

This is according to landlord research carried out by Pegasus Insight, which revealed that property maintenance and repairs remain the single largest cost faced by landlords.

Pegasus’s latest report, covering Q3 2025, revealed that landlords are now spending between 25% and 45% of their gross rental income on running costs, including maintenance, servicing, insurance, utilities, professional fees and regulatory compliance.

“Maintenance and repairs have always been a core cost for landlords, but what we’re seeing now is a step-change in scale,” founder and director of Pegasus Insight, Mark Long, commented.

“Even with yields at multi-year highs, a growing share of rental income is being absorbed by day-to-day running costs and compliance demands.

“For many landlords, particularly those with older stock or more complex portfolios, the challenge is no longer generating income, it’s protecting margins in the face of rising costs.”
Long added that higher spending does not automatically translate into an improved experience for renters.”

Average total annual expenditure now stands at £19,604 for landlords with non-HMO properties, rising to £35,720 for those operating HMOs, while the average buy-to-let portfolio generates gross income of £79,000 per year.

Pegasus highlighted that the primary difference in spend distribution between HMO and non-HMO landlords is the amount spent on utility bills, which is more than four times higher for HMO landlords – 16% against 4% – who more commonly include these in the rent they charge.

The findings come despite strong rental yields reported elsewhere in Pegasus’ Q3 research, underlining the growing cost pressures facing landlords as they seek to maintain standards and comply with an expanding regulatory framework.

“Our wider research shows that landlords are investing more than ever to keep properties safe, compliant and habitable, yet maintenance remains a pressure point in the rental relationship,” added Long. “Rising labour costs, supply chain issues and higher tenant expectations all make delivering timely repairs more challenging.

“The risk is that sustained increases in upkeep costs ultimately feed through into higher rents, as landlords look for ways to fund the ongoing investment required to keep properties in good condition.”

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